Test Questions

A Professional Employer Organization typically handles only which of the following employer tasks?

"Administration functions

The Florida insurance rule that establishes procedures that must be followed by agents who are recommending changes to existing coverage is the Florida

"Replacement Rule"

A licensee may NOT transact insurance business in Florida until which of the following occurs?

"The licensee is appointed by an insurer

An insurance policy on the life of another person is valid if the policyowner has an insurable interest in the insured at which of the following times?

"When the application is made"

For an individual disability policy that is paid for on an annual premium basis, the Grace Period provision is a MINIMUM of how many days

31

Health insurance will automatically be placed back in force if the insurer fails to notify an applicant that the reinstatement application was denied within how many days from the application date?

45

When the HMO is represented by a group of physicians who are salaried employees and work out of the HMO's facility, this is known as which of the following?

A Closed panel

A Variable Whole Life policy offers which of the following features?

A fixed, level premium

All of the following statements about the classification of applicants are correct EXCEPT

A substandard applicant can never be rejected outright by the insurer

Insurance companies may use all of the following sources to obtain underwriting information about an applicant EXCEPT

Actuarial rating bureaus

When submitting an application for an individual policy to an insurance company, a producer should take which of the following actions?

Advise the company of any other relevant information not contained in the application

Which of the following would be a certificate holder under a trustee group life policy?

An employee

To be eligible for an association group life policy, a group MUST meet which of the following requirements?

Be formed for a purpose other than obtaining insurance

All of the following are a part of the "rules of disclosure" EXCEPT

Conditional receipt

Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?

Conversion privilege

The policy provision that prevents an insurance company from altering its agreement with a policyowner by referring to documents or other items not contained in the policy is called the

Entire contract provision

Which of the following features would be used in a life insurance policy to limit benefits for loss occurring while the insured is flying as a student pilot?

Exclusion

A 44-year old accountant purchased an Annuity that will begin paying a guaranteed $1,000 a month at age 65 for life. Which of the following Annuities was purchased

Fixed Deferred

Which of the following statements about a five-year old Whole Life policy is CORRECT

If a policyowner stops paying premiums, the policyowner may elect a Nonforfeiture option"

Policy delivery refers to the delivery of the

Insurance contract to the applicant

Which life insurance arrangement is used to circumvent state insurable interest statutes

Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI)

Which of the following statements about an Incontestable clause is CORRECT

It allows an insurer to contest a claim during the Contestable Period

Which of the following statements is CORRECT about Medicare?

It is a hospital and medical expense insurance program

Which of the following statements is CORRECT about a Straight(pure) Life annuity option for a single life?

It pays for the life of the annuitant

Which of the following statements is CORRECT about Credit Life Insurance?

It shall be issued in an amount not to exceed the total amount of indebtedness

An insured files a written Proof of Loss for a Disability Income claim on May 20. If the insurer does not respond to the claim, what is the earliest date on which the insured can take legal action against the company?

July 20

All of the following entities are managed care organizations EXCEPT

MIB

Which of the following medical care expense programs is partially funded by the federal government and administered by individual states?

Medicaid

A policy that is overfunded, according to IRS tables, is classified as which of the following types of policies?

Modified Endowment Contract

Which of the following statements describes the income tax treatment of policyowner dividends

Only interest on accumulations is taxed

Which of the following provisions states to whom claims will be paid?

Payment of Claims

The policy feature that permits the policyowner to select the timing of premium payments is

Premium Mode

Credit policies MUST be issued in which of the following forms?

Term

The Department of Financial Services will consider all of the following factors when determining whether an agent's home is an insurance agency EXCEPT

The amount of premium revenue generated there

Which of the following circumstances limits the amount of the monthly benefit that an insured may purchase in a Disability Income Policy?

The insured's earned income at the time of purchase

Which of the following statements is CORRECT if the premiums on a participating policy are waived because of an insured's disability?

The insurer will continue to pay declared dividends

Which of the following statements is CORRECT about a Whole Life Policy?

The policyowner may borrow against the cash value of the policy

Preexisting Conditions are referred to in which of the following required Accident and Health policy provisions?

Time Limit on Certain Defenses

The applicant's signature is required on a life insurance application for which of the following reasons?

To represent that the statements on the application are true to the best of the applicant's knowledge

Which of the following provisions in a Group Health policy gives an insurance company the rights to delay coverage for a covered sickness for a specified number of days after the effective date of the policy?

Waiting Period

A life insurance policy written for a specified period of time with a death benefit that changes regularly according to a schedule is

a decreasing term policy

Dread Disease policies cover

a single disease or illness only

All of the following provisions are required in a group life policy EXCEPT

an Accidental Death and Dismemberment provision

The Legal Actions provision of an Accident & Health policy requires that

an insured wait at least 60 days after the submission of Proof of Loss before filing a lawsuit".

The benefits under COBRA continuation coverage will end if the

employer terminates all group health plans

A prospective insured who has had asthma for years applies for a Disability income policy. In this situation, the insurance company may take all of the following actions EXCEPT

issue the policy with a modified Time of Payment of Claims provision

A 40 year old insured who buys a Single Premium Whole Life Policy and lives to age 85 will have paid a total out-of-pocket cost that is

less than the premiums paid for a Straight Life policy

Agents may be found guilty of defamation if they make a false statement that is intended to

malign another insurance company

According to the Consideration clause, in a life policy the consideration given by the insurance company is defined as the promise to

pay a death benefit to a named beneficiary

The purpose of the insuring clause in a Health and Accident policy is to

pecify the scope and limits of the coverage provided

All of the following statements concerning the tax treatment of premiums and benefits of individually paid Accident & Health insurance are correct EXCEPT

premiums paid for Disability income policies are tax-deductible

A medical flexible spending account (health savings account,or HSA) MAY be used to pay for

prescription drugs

Dental care indemnity plans

reimburse services only after the carrier receives the bill

Under the Claims Forms provision of a health policy, if the insurance company fails to send out the claim forms within the time period required by the provision, the insured should

submit the claim in any form, which must be accepted by the company as adequate proof of loss

Under an employer/employee group health plan

the employer receives a master policy and the employees receive certificates

Under a Limited-Pay Life policy, the death benefit coverage usually continues

to age 100

The Florida Life and Health Insurance Guaranty Association was established to provide funds

to protect an insured in the event of an insurer's insolvency

The insurance phrase which considers a particular fee charged by a physician, dentist, or other health professional is

usual, customary, and reasonable expenses

A person may first become eligible for disability benefits under Social Security after having been disabled for

"5 months"

All of the following rights are extended to a policyowner EXCEPT

changing a contract provision

Life insurance written to cover a need for a specified period of time at the lowest premium is called

level term insurance

In a policy with a rear-end loaded provision, surrender charges are deducted

when the policy is discontinued